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News Article

Could Airbnb Be Banned in Mexico City?

By MBN Staff | Wed, 07/22/2020 - 11:45

For years, the hosting industry has accused platforms like Airbnb of unfair competition, as landlords are not required to register as a business and therefore are not subject to the same protocols as the entire industry. Around the world, some of these platforms have already been regulated as their use has generated real estate speculation, higher housing prices and, in some cases, gentrification. Now, Mexico City has its eyes set on these platforms.

On July 15, MORENA Deputy Leticia Estrada Hernández presented an initiative to replace the existing condominium property law of the Federal District (now Mexico City). Her proposal includes an article on the possible ban of Airbnb in the country's capital

The condominium property law aims to regulate condominium life and administrative activity within residential areas. It was published in December 1998 and has been updated and reformed in 2003, 2011 and 2017. Estrada’s initiative, in Article 17, says that owners and residents must use their private property only according to the authorized land used expressly contained in the property’s constitutive deed".

"In properties subject to the condominium regime, it is prohibited to carry out industrial, commercial or service activities at privately owned units for residential use and for no reason may they be used for temporary accommodation, such as that offered by the Airbnb platform or similar modalities in contravention of condominium, commercial, health, civil protection, land use, tax, and other regulations,” says the initiative. 

The proposed law is still in the public consultation phase and can be voted on by citizens until July 29th.

COVID-19, Another Threat

Airbnb also faces an uncertain future due to the losses it has experienced due to the COVID-19 pandemic, said CEO Brian Chesky. "It took us 12 years to build Airbnb and we lost almost everything in four to six weeks," he said in an interview for CNBC in late June.

Chesky spoke about the changes the tourism sector will face once the pandemic ends. “Tourism as we knew it is over. I do not want to say that the journey is over but rather that the model we knew has died and will not return,” he said. As for the company's IPO, Chesky said it is now uncertain. The CEO said that due to COVID-19, people "do not want to get on a plane, travel for business or cross borders. We are going to get in our cars, drive a few kilometers to a small community and stay in a house.”

Before the COVID-19 pandemic, Airbnb had 6 million accommodation listings worldwide, more than 100,000 of them located in Mexico. The entities with the highest activity on the platform were Mexico City, Jalisco, Quintana Roo and Baja California, although 70 percent of the properties advertised were in places that are not typically touristic. According to the annual reports of the California-based company, during 2018, an economic spill of US$2.7 billion was generated in Mexico.

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